Though Forex trading was done only by banks and large financial institutions in the past, today even individuals can take part in Forex trading and can make profits from speculative activities. However the key players in Forex trade are banks. These institutions make up for more than 75% of all Forex trading. The banks normally trade for their own profit and also for their client’s profit.
Then we see the brokers who trade in Forex as well. These act like an intermediary between the banks and their customers. The banks don’t have time to deal with each and every individual and hence they deal with brokers. Majority of the brokers deal with smaller banks than larger banks. Big corporations also play a major stake in Forex trade.
The companies that have global businesses hedge their investments so they don’t have to incur much loss in case the market moves way to far from their expectations. Some of these companies have a separate Forex desk from where the staff operates. The Forex signals they use can be very similar of what a retail traders uses.
Last but not the least is the central banks and the government. Since the banks need a considerable amount of currency in their reserves worth in millions of dollars they do Forex trading. The central bank may also try to influence the currency to divert in one direction so that it can maximize its profit.
So we see that the above mentioned organizations are the most active in Forex trading. However there is a lot of planning and analysis involved if one wants to maximize his profits in Forex trading.
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